Saturday, May 23, 2015

No Progress Since the War on Poverty Began Half a Century Ago

Eleven days ago, President Obama took the opportunity at Georgetown University to defend the government’s 50-year experiment in anti-poverty welfare programs. The president claimed:

It is a mistake for us to suggest that somehow every effort we make has failed and we are powerless to address poverty. That’s just not true. First of all, just in absolute terms, the poverty rate, when you take into account tax and transfer programs, has been reduced about 40 percent since 1967.

The president assumes that after spending $22 trillion (in inflation-adjusted dollars) on federal and state anti-poverty programs since the Great Society’s inception in 1964, a 40% reduction in the poverty rate would be some sort of victory. But is this statistic even meaningful? Has there really been a substantial reduction in the rate of American poverty since LBJ declared an “unconditional war” on poverty half century ago? Has this incomprehensibly vast sum really gone to waste?

Yes, it has. After you take into account the transfer payments themselves, such as means-tested tax credits, food stamps, welfare checks, and other handouts, not including Social Security or Medicare, and after adjusting for inflation, there has been no significant reduction in poverty itself. In 2014, the Census Bureau reported that the American poverty rate was 14.5%. In 1965, the very first year the War on Poverty programs began, it was 17.3%. In sum, $22 trillion purchased not even a 3% reduction in real poverty. Even this “reduction” is illusory, because the poverty rate fluctuates year by year with the rate of the economy growing or slowing.Via: American ThinkerContinue Reading....